Using Bridging Finance to Refinance an Expiring Development Loan and Facilitate Property Sale

Client Background

Our clients were a married couple based in Hemel Hempstead, Hertfordshire, who owned their residential property outright alongside a newly constructed residential property.

The clients had recently completed the construction of a new three-bedroom end-of-terrace property, built to a high specification with all relevant sign-offs and warranties in place.

At the time of the application, the clients had moved into the newly constructed property while their previous home was already being marketed for sale.

The Scenario

The clients required funding to refinance an expiring development facility and allow additional time for the sale of their existing property.

Their objectives were to:

• Raise approximately £232,500
• Repay an existing bridging facility before expiry
• Replace the expiring short-term finance arrangement
• Allow up to 12 months to sell their existing property
• Structure the borrowing on a short-term basis
• Exit the facility through the future sale of the original property

The refinance was intended to provide the clients with sufficient flexibility to sell the property without pressure or the need for costly extensions.

The Challenges

This case involved several important complexities that required fast action and careful structuring.

The transaction centred around refinancing an expiring development-related facility within a tight timeframe.

The repayment strategy relied entirely on the future sale of the clients’ original property, while the clients themselves had a relatively modest income profile.

Traditional lenders were unsuitable due to the short-term nature of the requirement, the urgency involved, and the reliance on a sale-based exit strategy.

The Solution

We arranged a tailored regulated bridging loan designed specifically to refinance the expiring facility and provide additional time for the property sale.

The funding solution included:

• A net loan amount of approximately £232,500
• A 12-month term
• A loan-to-value of approximately 28.18%
• Rolled-up interest with no monthly repayments required
• First charge security against the property
• Fees added to the loan to preserve liquidity

The structure enabled the clients to refinance the existing borrowing while avoiding unnecessary pressure to sell quickly below market value.

Implementation Process

This case required a fast and carefully structured approach throughout the transaction.

We carried out a detailed assessment of the clients’ development position, refinance requirement, and proposed exit strategy before structuring a bridging facility aligned to the future property sale.

A suitable lender was sourced that could accommodate time-sensitive refinance requirements and provide sufficient flexibility around the planned sale process.

Throughout the process, communication between all parties was managed proactively to ensure the refinance completed efficiently before the expiry of the existing facility.

The Outcome

The bridging loan completed successfully, enabling the clients to refinance the expiring facility and proceed with the sale process without unnecessary pressure.

As a result, the clients were able to:

• Repay the expiring bridging facility before maturity
• Avoid costly extensions or penalties
• Allow sufficient time to market and sell the property properly
• Maintain flexibility through rolled-up interest with no monthly repayments
• Proceed with a clear and manageable exit strategy